Market Overview

Excellent First Half for LVMH

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LVMH Moët Hennessy Louis Vuitton, the world's leading luxury products
group, recorded revenue of €21.8 billion in the first half of 2018, an
increase of 10%. Organic revenue growth was 12% compared to the same
period in 2017. It was up 14% when excluding the impact of the
termination of the Hong Kong International Airport concessions at the
end of 2017. The United States, Asia and Europe experienced good growth.

In the second quarter, revenue increased by 11% compared to the same
period of 2017, a performance in line with the trends of the beginning
of the year. Organic revenue growth was 11%.

Profit from recurring operations was €4 648 million for the first half
of 2018, an increase of 28%. Operating margin reached 21.4%, an increase
of 2.9 percentage points. Group share of net profit amounted to €3 004
million, an increase of 41%.

Bernard Arnault, Chairman and CEO of LVMH, commented: "The excellent
results of the first half of the year attest to the strong desirability
of our brands and the effectiveness of our strategy. The performance of
the first half is even more remarkable given the unfavorable currency
environment. The standards of quality and creativity required from our
Maisons, which combine both modernity and tradition, are key to LVMH's
success, always driven by a long-term vision. Despite buoyant global
demand, monetary and geopolitical uncertainties remain. In this context,
we will stay vigilant and rely on the talent of our teams and the shared
entrepreneurial passion to further increase our leadership in the world
of high quality products in 2018."

Highlights of the first half of 2018 include:

  • Double-digit increases in revenue and profit from recurring operations,
  • Strong growth in Asia and the United States,
  • Good start to the year for Wines and Spirits,
  • Outstanding momentum at Louis Vuitton; profitability remains at an
    exceptional level,
  • Success of new products at Christian Dior across all product lines,
  • New creative talent at several fashion brands,
  • Excellent performance of Bvlgari,
  • Good performance of watch brands,
  • Sephora's strong revenue growth in stores and online,
  • Rebound of profitability at DFS,
  • Cash from operations before changes in working capital was €5.5
    billion, an increase of 21%,
  • Net debt to equity ratio of 23% as of the end of June 2018.
           

Key figures

                 

Euro millions

    First half 2017*     First half 2018     % change
Revenue 19 714 21 750 + 10 %
Profit from recurring operations 3 640 4 648 + 28 %
Group share of net profit 2 127 3 004 + 41 %
Cash from operations** 4 501 5 464 + 21 %
Net Financial Debt 3 850 7 359 + 91 %
Total Equity     28 282     31 482     + 11 %
* Restated for the effects of the application of IFRS 9 Financial
instruments.
** Before changes in working capital.
 

Revenue by business group:

Euro millions    

First half

   

First half

   

% change

   

2017

   

2018

   

Reported

   

Organic*

Wines & Spirits     2 294     2 271     - 1 %     + 7 %
Fashion & Leather Goods     6 899     8 594     + 25 %     + 15 %
Perfumes & Cosmetics     2 670     2 877     + 8 %     + 16 %
Watches & Jewelry     1 838     1 978     + 8 %     + 16 %
Selective Retailing     6 280     6 325     + 1 %     + 9 %**
Other activities and eliminations     (267)     (295)     -     -
Total LVMH     19 714     21 750     + 10 %     + 12 %
* with comparable structure and constant exchange rates. The
currency effect for the Group was -8% and the structural impact was
+6%.
** + 15% excluding the termination of the Hong Kong International
Airport concessions.
 

Profit from recurring operations by business group:

Euro millions     First half

2017

    First half

2018

    % change
Wines & Spirits     681     726     + 7 %
Fashion & Leather Goods     2 192     2 775     + 27 %
Perfumes & Cosmetics     292     364     + 25 %
Watches & Jewelry     234     342     + 46 %
Selective Retailing     441     612     + 39 %
Other activities and eliminations     (200)     (171)     -
Total LVMH     3 640     4 648     + 28 %
           

Wines & Spirits: strong momentum in China and good progress in Europe
and the United States, despite supply constraints

The Wines & Spirits business group recorded organic revenue
growth of 7%. Profit from recurring operations increased by 7%. The
business group pursued its value strategy based on a strong policy of
innovation and targeted investments in communication. In the champagne
business, prestige vintages were particularly dynamic while a firm price
increase policy continued. Europe and Japan progressed while the United
States was in decline due to a delay in shipments. Hennessy cognac
continued to show strong growth in the US market in a tight supply
environment; the Chinese market continued to develop rapidly.

Fashion & Leather Goods: strong desirability at Louis Vuitton across
all its activities and further strengthening of other brands

The Fashion & Leather Goods business group recorded organic
revenue growth of 15%. Profit from recurring operations was up 27%. The
remarkable growth at Louis Vuitton continues to be driven by its
exceptional creativity, and by the right balance between tradition and
modernity, the success of icons and the new creations by Nicolas
Ghesquière. Of note during the first half was the arrival of Virgil
Abloh, as Menswear Artistic Director, whose debut fashion show was
widely commented on across social media, and was exceptionally well
received. Christian Dior, consolidated since the second half of 2017,
had an excellent performance. Kim Jones, appointed Artistic Director of
Dior Homme, unveiled his first collection, which also received a
formidable welcome. Céline entered a new and ambitious stage of its
development with the appointment of Hedi Slimane as Artistic, Creative
and Image Director of the brand, whose first collections will be
presented in September. Fendi and Loro Piana continued to grow. Other
brands further strengthened.

Perfumes & Cosmetics: all brands contributed to strong growth with
rapid progress in Asia

The Perfumes & Cosmetics business group posted organic
revenue growth of 16%. Profit from recurring operations was up 25%.
Christian Dior achieved an outstanding performance, driven by the
vitality of its iconic fragrances J'adore and Miss Dior,
and by the great success of Sauvage. Makeup and skincare
progressed strongly. Guerlain benefited from the remarkable growth of
the iconic Rouge G lipstick and rapid progress in its skincare
line, Abeille Royale. Parfums Givenchy maintained its rapid
growth in makeup. Benefit successfully enhanced its mascara range and
its Brow collection. Fresh, Fenty Beauty and Acqua di Parma grew
strongly.

Watches & Jewelry: excellent first half for Bvlgari and good
development of watch brands' iconic product lines

The Watches & Jewelry business group recorded organic revenue
growth of 16%. Profit from recurring operations was up 46%. Bvlgari had
an excellent first half and continued to gain market share. This
performance was especially notable in jewelry and in the Chinese and
American markets. The iconic lines Serpenti, B-Zero 1, Diva and Octo
made strong progress. Chaumet unveiled its new high-end jewelry
collection. The momentum at TAG Heuer was reflected in the innovations
of its flagship collections Carrera, Aquaracer and Formula 1,
and a smaller version of its smart watch was launched. Hublot enjoyed
strong growth and benefited from the enhanced visibility of the brand as
the Official Timekeeper of the FIFA World Cup.

Selective Retailing: continued good momentum of Sephora and strong
rebound of profitability at DFS

The Selective Retailing business group posted organic revenue
growth of 9% or 15% excluding the closure of its concessions at Hong
Kong International Airport. Profit from recurring operations was up 39%.
Sephora achieved sustained growth across all areas of operation. With
omni-channel at the heart of its strategy, online sales advanced
rapidly. At the same time, Sephora expanded and renovated its store
network. Le Bon Marché continued to cultivate its uniqueness and the
exclusivity of its product offering; the online platform 24 Sèvres
launched a year ago developed actively. DFS enjoyed an excellent start
to the year. Performance was particularly good in Hong Kong and Macao
while its Gallerias, recently opened in Cambodia and Italy, made
remarkable progress. The termination of the loss-making Hong Kong
International Airport concessions at the end of 2017 contributed to the
strong rebound of profitability.

Outlook 2018

In the buoyant environment of the beginning of this year, albeit marked
by unfavorable exchange rates and geopolitical uncertainties, LVMH will
continue to pursue gains in market share through the numerous product
launches planned before the end of the year and its geographic expansion
in promising markets, while continuing to manage costs.

Our strategy of focusing on quality across all our activities, combined
with the dynamism and unparalleled creativity of our teams, will enable
us to reinforce, once again in 2018, LVMH's global leadership position
in luxury goods.

An interim dividend of 2 Euros will be paid on December 6th,
2018.

Regulated information related to this press release, the half year
results presentation and the half year financial statement are available
on our internet site
www.lvmh.com

Limited review procedures have been carried out, the related report
will be issued following the Board meeting.

ANNEX

LVMH – Revenue by business group and by quarter

Revenue first half 2018 (Euro millions)

2018  

Wines &
Spirits

 

Fashion &
Leather Goods

 

Perfumes &
Cosmetics

 

Watches &
Jewelry

 

Selective
Retailing

 

Other activities
& eliminations

  Total
First quarter   1 195   4 270   1 500   959   3 104   (174)   10 854
Second quarter   1 076   4 324   1 377   1 019   3 221   (121)   10 896
First half   2 271   8 594   2 877   1 978   6 325   (295)   21 750
 

Revenue first half 2018 (organic growth compared to the first
half 2017)

2018  

Wines &
Spirits

 

Fashion &
Leather Goods

 

Perfumes &
Cosmetics

 

Watches &
Jewelry

 

Selective
Retailing

 

Other activities
& eliminations

 

   Total

First quarter   +10%   +16%   +17%   +20%   +9%   -   +13%
Second quarter   +3%   +13%   +14%   +12%   +9%   -   +11%
First half   +7%   +15%   +16%   +16%   +9%   -   +12%
 

Revenue first half 2017 (Euro millions)

2017  

Wines &
Spirits

 

Fashion &
Leather Goods

 

Perfumes &
Cosmetics

 

Watches &
Jewelry

 

Selective
Retailing

 

Other activities
& eliminations

  Total
First quarter   1 196   3 405   1 395   879   3 154   (145)   9 884
Second quarter   1 098   *3 494   1 275   959   3 126   (122)   9 830
First half   2 294   6 899   2 670   1 838   6 280   (267)   19 714
* Includes all Rimowa revenue for the first half of 2017.
 

LVMH

LVMH Moët Hennessy Louis Vuitton is represented in Wines and Spirits
by a portfolio of brands that includes Moët & Chandon, Dom Pérignon,
Veuve Clicquot Ponsardin, Krug, Ruinart, Mercier, Château d'Yquem,
Domaine du Clos des Lambrays, Château Cheval Blanc, Colgin Cellars,
Hennessy, Glenmorangie, Ardbeg, Belvedere, Woodinville, Volcán de Mi
Tierra, Chandon, Cloudy Bay, Terrazas de los Andes, Cheval des Andes,
Cape Mentelle, Newton, Bodega Numanthia and Ao Yun. Its Fashion and
Leather Goods division includes Louis Vuitton, Christian Dior Couture,
Céline, Loewe, Kenzo, Givenchy, Thomas Pink, Fendi, Emilio Pucci, Marc
Jacobs, Berluti, Nicholas Kirkwood, Loro Piana and RIMOWA. LVMH is
present in the Perfumes and Cosmetics sector with Parfums Christian
Dior, Guerlain, Parfums Givenchy, Kenzo Parfums, Perfumes Loewe, Benefit
Cosmetics, Make Up For Ever, Acqua di Parma, Fresh, Fenty Beauty by
Rihanna and Maison Francis Kurkdjian. LVMH's Watches and Jewelry
division comprises Bvlgari, TAG Heuer, Chaumet, Dior Watches, Zenith,
Fred and Hublot. LVMH is also active in selective retailing as well as
in other activities through DFS, Sephora, Le Bon Marché, La Samaritaine,
Groupe Les Echos, Cova, Le Jardin d'Acclimatation, Royal Van Lent and
Cheval Blanc hotels.

"This document may contain certain forward looking statements which
are based on estimations and forecasts. By their nature, these forward
looking statements are subject to important risks and uncertainties and
factors beyond our control or ability to predict, in particular those
described in LVMH's Reference Document which is available on the website
(
www.lvmh.com).
These forward looking statements should not be considered as a guarantee
of future performance, the actual results could differ materially from
those expressed or implied by them. The forward looking statements only
reflect LVMH's views as of the date of this document, and LVMH does not
undertake to revise or update these forward looking statements. The
forward looking statements should be used with caution and
circumspection and in no event can LVMH and its Management be held
responsible for any investment or other decision based upon such
statements. The information in this document does not constitute an
offer to sell or an invitation to buy shares in LVMH or an invitation or
inducement to engage in any other investment activities."

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